Price gouging news roundup (March 2011)

Surprisingly, I liked this story, though (and probably because) they mostly sidestep their question about price gouging and instead go in pursuit of “the highest priced gasoline in America.” They find it at a convenience store just outside of the airport in Orlando, Florida. (You’ve got to watch consumer reactions when the reporter asks them to actually look at the price before they pump the gas.) We’ve discussed the station before on Knowledge Problem, see “Orlando wants to discourage high gas prices near the airport“.

The ABC News story noted that California is the state with the highest average gasoline prices ($3.959 according to AAA as of today) and Wyoming is the state with the lowest average gasoline prices (currently $3.268). I wish they would have pointed out that California has the highest state gasoline tax – at over 66 cents/gallon – while Wyoming has the second lowest state gasoline tax – under 33 cents/gallon. (Source, p. 2)

Elsewhere in price gouging news:

President Obama directs U.S. government agencies to aid state attorneys general in monitoring for gasoline price gouging. I take this as good news, more or less, since the Federal Trade Commission staff generally does a better job than state attorneys general of understanding the economics of gasoline pricing. There is the usual vaguely ominous political threat implied by the statement, but at least so long as the FTC can act based on science rather than politics (and isn’t that what the administration wants for its regulatory policy?) then I’m not worried.

Last week Mississippi’s highest court ruled that the state’s anti-price gouging law is not too vague to be constitutional. One gasoline station owner cited for price gouging after Hurricane Katrina had protested that phrases in the law like “same market area” were not defined and references to prices “at or immediately before” the declaration of emergences wasn’t sufficiently clear. A local judge agreed, but the state’s Supreme Court said the meaning was plain enough to be legal. The case will return to the local court for a ruling on the substance of the allegation. A story in the Clarion-Ledger includes remarks from the state Attorney General.

Connecticut state legislature seeks to expand state law to cover price gouging on services in addition to the already covered price gouging on goods. Senate Majority Leader Martin Looney (yes that’s his name) said the heavy winter weather exposed “glaring weaknesses in our price gouging statutes.” (See the law here.)

Rep. Tim Bishop (D-NY) and co-sponsors have filed a Federal Price Gouging Prevention Act (H.R. 964) that would authorize criminal fines of up to $500 million and civil penalties up to $100 million for retail or wholesale price gouging during periods for which the President has proclaimed “an international crisis affecting oil markets” exists. The congressman’s press release says the bill “could also apply to speculation in the oil futures market,” but the congressman’s press release is lying. The bill applies to retail and wholesale transactions, it carefully defines retail and wholesale, and oil futures trades do not qualify as wholesale or retail transactions under the proposed law. Perhaps the congressman should read the bill. (PDF from gpo.gov.)